Boosting economic efficiency of pads drilling projects. A comprehensive study of wells groupings and localization of the global maximum

Abstract

The work demonstrates an approach to improve economic performance of well pads drilling projects by selecting an appropriate grouping of wells (wellheads). Scope of the work covers all thinkable groupings of a 24-well pad. We systematically enumerate groupings and estimate economic parameters of every grouping. Results of these calculations are represented in the form of NPV (Net Present Value) surfaces and NPV distributions which naturally locate global maxima for different starting flow rates. It is shown that traditionally used in oil industry groupings of wells do not provide the best economic efficiency of pads drilling projects. The top economic results could only be achieved by taking into account all available information on performance of wells. On basis of the study it is suggested to reconsider design of prospective well pads applying presented approach to boost economy of drilling.The problem of finding optimal wells grouping could be defined in two ways: specific and general. The specific formulation implies equal (constant) number of wells in every group, whereas the general formulation admits having different number of wells in the groups. It is clear that computational complexity of the specific formulation is much smaller than that of the general. The total number of groupings in the specific case is bounded from above by the product of number of wells in every group and number of these groups, i.e. for a well pad of 24 wells the total number of possible groupings is less than 576. If the total number of wells in a pad is N then the number of groupings in the general case is 2^(N-1), i.e. for a pad of 24 wells this gives 8,388,608 possible groupings. Having all these grouping options considered it is easy to show that the largest increase in NPV of a pad could be achieved with unequal (varying) number of wells in groups. Further analysis shows that NPV maximizing well pad configurations depend on characteristics of wells, especially the starting flow rate.Economic performance of the optimal groupings is compared with that of the pad consisting of six groups each including four wells. NPV increase of the optimal groupings is exceeding 1% and in carefully chosen parameters of the economic model reaches few millions to tens of millions of Russian rubles. It is demonstrated that reasons for these gains are, in decreasing order of importance: (i) increased oil production accompanied with elevated CAPEX (Capital Expenditures); and (ii) decreased CAPEX accompanied with reduced oil production.